Consumer lending rates remained high in April and are unlikely to have dropped much in May

RUSSIA ECONOMICS - In Brief 08 Jun 2022 by Alexander Kudrin
The CBR reported that the average weighted consumer lending rate didn’t change much in April, despite the fact that the regulator cut the key rate from 20% to 17% (effective from April 11). Monthly average lending rate for credits with maturity up to 1Y, were at 25.79%, while interest rates for longer-term credits with maturity over 1Y averaged at 15.20% in April. Note that the latter figure includes subsidized mortgages. Auto credits were costly as well – 21.08% for credits with maturity up to 1Y and 23.64% with a maturity exceeding 1Y. These levels look prohibitive for a distressed economy. As inflation subsided, the CBR orchestrated another rate in May but the effect may have not been felt by consumers yet as many large lenders experience their own problems associated with sanctions. The CBR is likely to continue its key rate cuts in the coming months in order to revive consumer lending and support the economy. By year-end, the key rate is expected to fall well below 9% even though y-o-y inflation will still be double-digit. Evgeny Gavrilenkov Alexander Kudrin

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